In ‘Is Pakistan wheat insecure?', it was established that per capita wheat availability in the country stands at an average 122kg, putting it among world's top 25 regions for wheat consumption. Going by calculations of wheat supply in a recent draft study on flour industry by Competition Commission, this column got the number dead wrong.
While it is correct that annual domestic wheat production during past decade has averaged at 25.5 million tons, the CCP document notes that after accounting for factors such as seed and fodder usage, post-harvest loss, external trade, and smuggling, net supply stands at 14 million tons (three-year average), equivalent to barely 67kg per capita per annum.
If the 122kg figure is wide off the mark, BR Research is certainly not the only one to have made this error. For example, SBP's quarterly State of the Economy report noted that wheat “stocks are sufficient to cover domestic consumptive requirements of 25.8 million tons", basing it on per person requirement of 120kg as per MNFSR.
Similarly, an UN-FAO report from 2013 puts Pakistan's wheat consumption for ‘food use' at 126kg, whereas a USDA-FAS report from 2017 noted wheat use at 124kg, calling it ‘one of the highest in the world'. In fact, the same CCP draft document places per capita consumption of wheat between 120-124kg per annum.
Has CCP made a faux pas? It is very hard to say so. On surface, stable annual production coupled with negligible imports may indicate that Pakistan is mostly self-sufficient in wheat. Thus, crop output is used to extrapolate per capita availability and consumption.
Nevertheless, CCP's estimate is not without basis. According to Global Dietary Database (DDG) of Tufts University, Pakistan's per person whole-grain and fibre-based intake (inclusive of wheat and all other cereals) is just 10.6kg! This column had noted that instead of being one of the world's highest wheat consumers, the estimate from Tufts places Pakistan among few regions that are severely deficient in nutrient from cereal grains.
Mounting evidence from various local and international studies into food security indicate that CCP's estimate may be onto something.
If wheat is in adequate or surplus supply and wheat flour contributing up to 72 percent of caloric intake, why is more than one-fifth of the population still undernourished? Second, average annual wheat procurement by PASSCO, the primary buyer in the crop market, stands at only 6 million tons.
Even if open market contracts are equal to PASSCO operations – a very generous assumption – that still leaves more than half of the annual crop production unaccounted for. And that's where CCP's estimate of pre-milling diversions (external trade, fodder, and losses) comes into play.
Pakistan, as it turns out, is among fifteen worst countries with extreme levels of inequality in caloric distribution across population, as measured by UN-FAO using coefficient of variation. All considered, it is a very real possibility that the country may well be wheat-insecure, even if it is among top eight producers globally. As the CCP study elsewhere notes, reliable estimates of number of total milling units, installed capacity, or processing and flour output, are missing – both with the industry association and relevant government departments.
Growing population pressures mean that Pakistan's demand for wheat flour will continue to compound in foreseeable future. While stakeholders across the policymaking sector insist on a dire need to improve crop yield to meet demand, quantifying crop loss is equally important.If actual domestic demand and consumption are unknown, all forecasting models using current output as basis become irrelevant.